TORONTO - Some of Ontario's largest labour unions vowed Friday to take on the provincial government over a plan to freeze the wages of more than one million public sector workers.

OPSEU president Warren "Smokey" Thomas said his union will try to find creative ways to work with the governing Liberals despite the funding freeze, but warned the plan laid out in Thursday's budget sets the stage for labour unrest.

"What it does to the collective bargaining climate is it sets it up to be nothing short of adversarial," said Thomas.

"There is no carrot for the employer, there's only a stick."

While he's happy to hear the Liberals will respect current agreements, Thomas said when inflation is taken into account, the wage freeze basically amounts to a wage cut for people like civil servants, teachers and doctors. His union "will vigorously defend our members' rights to a fair wage," he added.

"Do we have to have bake sales on Bay Street to pay for children services?" said Thomas.

"I'm quite willing to do that. If we have to embarrass the government some more, we will."

Fred Hahn, Ontario president of the Canadian Union of Public Employees, which represents 180,000 workers in the province, called the freeze "patently unfair."

"At a time of fiscal restraint there was no need to implement a corporate tax cut and have it be paid for by public sector workers," he said.

"Without having a crystal ball, I can say this is laying the groundwork for labour unrest."

The provincial government will immediately freeze the pay for non-unionized public sector workers and then cap compensation for unionized workers for two years after their existing contracts expire.

It's a move the governing Liberals said should lead to savings of $750 million.

Politics professor Henry Jacek said that despite the threats, unions are unlikely to rise up against the Liberals in the ways they did under former Conservative premier Mike Harris.

"With the Harris people it was very clear that they had a hostility toward labour unions and so they had no problem imposing (cuts) and they looked forward to demonstrations on the lawn of Queen's Park," said Jacek.

The Liberals have learned from those mistakes and they are taking a much more measured approach by announcing the freeze early and making it a gradual, negotiated transition, said Wilfrid Laurier professor David Docherty.

"There is a different attitude and culture," Docherty said.

"While the Harris years actively sought out the kinds of politics of divisiveness, it could be that among the senior ranks of unions and labour organizations there's an understanding that this is a government you can talk to and negotiate with."

The announcement in Thursday's budget may have also gotten an inadvertent boost from the New Democrats, who seemed to have been caught a little flat-footed on the issue, Docherty added, as well as from Progressive Conservative Leader Tim Hudak.

Hudak said the government should re-open the agreements now to freeze wages and find other savings.

"He might actually be helping the Liberals because whenever he starts to talk about opening up the contracts or even going further, all of a sudden, he's making the Liberals look like the nice guy," Docherty said.

Thomas agreed, saying that his union has worked well with the Liberals in the past, and since Hudak took over the party's leadership he feels somewhat stuck with a "middle" party that may be the lesser of two evils.

"I've met Hudak. He's a very, very intelligent person, he's articulate and well-spoken and very dangerous," said Thomas.

"He's so far in the right wing that I don't see how anybody can prosper. If he got into power, that would be scary."

Kevin Coon, a lawyer at the Toronto firm Baker and McKenzie, noted that re-opening the contracts would be illegal and require new legislation to be passed.

Telling unions now that there's no more money is actually healthy, he added, because it helps to manage expectations and steers them toward demands in other areas.

"Public sector agreements have many other provisions around hours of work and breaks and vacations and how things are scheduled, all of which can be important and have an impact in people's lives," Coon said.